Should 41's Legacy Of Civility Extend To The Boardroom?

In the aftermath of President George H.W. Bush’s death, much has been said about his personal qualities and their impact on his public service. Accolades about his dignity, honor, kindness and rectitude have been broadly expressed. So, too, have been comparisons—direct and indirect—to the absence of such qualities in current public discourse. For a moment at least, there is serious conversation on the merits of civility.

And as it is often with politics, so it is with corporate governance. The current public conversation presents a unique opportunity to consider the role of comity and cooperation in boardroom functions. Just what does the law expect of directors in terms of tone and comportment? Do fiduciary duties mandate a divisive and combative environment, or is kinder and gentler conduct more supportive of stakeholder interests? Is there room for respectful compromise between the extremes? Established governance principles offer an answer.

For example, corporate responsibility principles are grounded in the concept of active, informed participation by independent directors and advisers committed to the corporation’s best interests. While warning of the dangers of passivity and excessive deference to executives (directors are, after all, expected to speak up) they champion a culture of what is called constructive skepticism.

Governance experts such as Martin Lipton have long articulated a distinctly civil expectation for boardroom discourse. At its core, this envisions a tone at the top that establishes a corporate culture that gives priority to ethical standards, professionalism and integrity. It describes the board/CEO dynamic in terms of a “working partnership,” rather than an adversarial relationship. And it calls for a “truly colleagial” culture within the board and in its relationship with management.

More recently, the new Commonsense Principles 2.0 declares that collaboration and collegiality are critical for a healthy, functioning board and urges directors not to be divisive or self-serving.

These principles and guidelines signal a desire for productive, respectful boardroom engagement-- that appropriate scrutiny of ideas and proposals can co-exist with decorum and fiduciary duty. They run counter to perspectives that corporate purposes, and interests of the stakeholders, are best served by an aggressive, confrontational fiduciary style, that friction and disruption are somehow critical to effective decision making. Indeed, the purposely disruptive director recklessly flirts with the boundaries of loyalty.

The current, and possibly fleeting public conversation on civility offers a unique teaching moment for corporate boards. Proactive board chairs and CEOs may use the opportunity to engage with their colleagues on proper boardroom discourse. Is this ultimately a call for a kinder, gentler board? Not necessarily, at least not in the way President Bush imagined it. But it is at least a call to address the issue of fiduciary comity, and to confront the risks of a frictional and confrontational board culture.

To paraphrase the noted governance adviser Sonny Corleone: this isn’t politics, it’s strictly business (or more precisely, the business of governance).